Wednesday 01/08/2020

How the Newly Implemented SECURE Act Affects You

The recently passed appropriations bill includes the long-awaited SECURE (Setting Every Community Up for Retirement Enhancement) Act and other retirement-related rules. This act went into law on January 1, 2020.  This is the most significant change in retirement plan rules since 2006. 

Here is a summary of the major components:

  • The minimum distribution age increased from 70 ½ to 72
  • No more stretch IRAs, beneficiaries must withdraw all assets of an inherited account within 10 years
  • Ease of burden for multiple employer plans
  • Employer plans would also be able to enroll long-term part-time workers. Rather than 1,000 hours every year to be eligible, eligibility changed to 1,000 hours per year or three consecutive years of at least 500 hours
  • Auto-enrollment encouragement – a tax credit up to $500 will be available to employers who automatically enroll workers into their retirement plans
  • Offers more options for lifetime income strategies, such as annuities within retirement plans
  • Qualified birth or adoption distribution of up to $5,000 from a defined contribution plan will be allowed without paying the 10% penalty
  • 529 funds can now be used to pay down student loan debt, up to $10,000
  • A 529 plan may also be used to pay for certain apprenticeship programs

Please contact a member of your Corrigan Krause team, or contact Sheri Terens at sheri@corrigankrause.com for further discussion.

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